Dec 4, 2017 - Technology

The U.S. companies with the most cash parked overseas

Many of the largest U.S. companies — especially big tech players like Apple and Microsoft and pharmaceutical giants like Johnson & Johnson and Pfizer — have trillions of dollars parked in offshore subsidies. And they'd benefit immensely from the Republican tax overhaul, which would allow them to bring cash back into the U.S. at very low tax rates.

Data: Company data, Credit Suisse estimates; Chart: Axios Visuals
Data: Company data, Credit Suisse estimates; Chart: Axios Visuals

The details: Just 30 of the largest companies in the S&P 500 index have almost $900 billion of cash stashed overseas, based on company data and estimates compiled by Credit Suisse. Apple is the dominant cash hoarder in that group, with more than a quarter of a trillion dollars in international accounts.

Companies park their money in foreign subsidiaries to avoid having to pay the 35% U.S. corporate tax rate. If Republicans pass their tax overhaul legislation, companies would be able to bring that money back at a much lower rate (10% in the Senate bill, 14% in the House).

The biggest winners: Tech and pharma companies. The 10 companies with the most cash overseas are either tech or pharma conglomerates: Apple, Microsoft, Cisco, Oracle, Google's parent Alphabet, Johnson & Johnson, Amgen, Gilead Sciences, Pfizer and Merck.

For most of the largest tech and pharma companies, their overseas cash reserves represent more than 85% of all their available cash.

Get smart: A lot of the overseas cash is actually invested in U.S. securities, treasuries and corporate debt, but is not on the company's U.S. balance sheet, according to tax and finance experts. For the offshore money that is tied up in foreign accounts, companies have not guaranteed they would bring that money back. And even if they do, they haven't guaranteed they would invest those profits into raising wages, hiring more workers or building/upgrading facilities.

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